**Market Brief: INR Rebounds on US-India Trade Pact** **Current Status** The Indian Rupee (INR) is trading near **90.43** against the US Dollar as of February 4, 2026, stabilizing after posting its single-best daily gain in seven years. The currency rallied sharply from a record low of **92.00** earlier this week, driven by a breakthrough trade agreement between Washington and New Delhi. **Key Drivers** * **Tariff Slash:** The US has cut tariffs on Indian goods to **18%** (down from 50%), significantly boosting export sentiment for textiles, machinery, and industrial goods. * **Strategic Shift:** The deal includes provisions for India to halt Russian oil purchases, reducing geopolitical friction and reopening doors for foreign institutional investors (FIIs). * **Equity Rally:** Domestic markets (Nifty/Sensex) surged over **2%** in response, with renewed capital inflows supporting the local unit. **Forecast & Outlook** Bank of America projects the Rupee to strengthen further to the **88.60–89.00** range by March-end 2026. Analysts at other major desks (ICICI, Finrex) see immediate support at **89.50**, provided global oil prices remain stable. **Central Bank Stance** Despite the influx of foreign capital, the Reserve Bank of India (RBI) is actively intervening to cap excessive appreciation. * **Buying Activity:** The central bank was observed buying dollars around the **90.05** level to rebuild forex reserves and maintain export competitiveness. * **Policy Watch:** The RBI is expected to keep the repo rate steady at **5.25%** in the upcoming policy review, viewing the trade deal as a stabilizer that reduces the need for immediate monetary support. **Trend Monitor** * **Immediate Resistance:** 90.75 * **Immediate Support:** 89.50 * **Foreign Flows:** FIIs have turned net buyers, reversing months of heavy outflows.